SWP Calculator

Mutual funds and ULIPs provide an investing strategy known as a systematic withdrawal plan. This contrasts with a Systematic Investment Plan (SIP), wherein investors regularly make fixed-sum contributions to a mutual fund.

You must make a single, lump sum investment into an SWP fund to participate. This tool can take out a set sum of money or a variable amount based on pre-established terms. The withdrawal time is also decided and can be monthly, quarterly, or yearly

Let's say you start with Rs. 1,20,000 in a mutual fund. Each month, you withdraw Rs 10,000 through SWP for a year. With an expected yearly return of 7%, here's how it works:

• ●In the first month, after the withdrawal, your remaining balance is about Rs 1,10,642, with about Rs 642 earned in interest.
• ●This continues based on the period of your SWP.

The SWP calculator is closely related to the systematic withdrawal plan. Let us move our attention to that now!

Working on a SWP calculator

The calculator calculates the regular cash flow you can expect throughout your systematic withdrawal tenure. It uses a formula to compute the final value of your investment based on the parameters you input.

The calculator works on the below-stated formula:

A = PMT ((1+r/n)^nt – 1) / (r/n))

• A represents the final value of your investment, which is what the calculator aims to determine.
• PMT denotes the payment amount for each period, which is the fixed amount you withdraw at regular intervals.
• r stands for the expected interest rate or return on your investment.
• n is the number of periods over which the compounding will occur. This can be monthly, quarterly, or yearly.
• t stands for the tenure of your investment.

The calculator then processes this information to provide several key outputs

• Final investment value: This is the approximate total worth of your investment after all expected withdrawals and interest payments have been made.
• Total amount invested: This shows the total money you have put into the plan over its lifetime.
• Withdrawal amount: The system will take this much from your investment account annually.

A SWP calculator helps individuals understand what may happen with their investments. It enables people to make well-informed decisions about their financial planning and assists them in determining whether the withdrawal method they have selected is sustainable.

How to use a SWP calculator?

Using a SWP calculator is a simple process. The method involves entering specific details to assess your investment's performance accurately.

Enter the initial investment amount in the form. Then, specify the monthly withdrawal you plan on taking from it.

Next, determine the expected return rate based on historical performance or projected market trends.

Lastly, enter the duration or tenure of your investment plan. Once all the information is inputted, the calculator computes various vital figures.

Why should you use a SWP calculator?

Can you do the maths yourself and work out critical figures like the total investment made, the accumulated interest earned, and so on? While we believe you can do that, several reasons support using a SWP calculator.

• Accuracy: People invest in significant figures, and manually calculating the investment returns can be difficult. With the SWP calculator, you can rest assured about data privacy.
• Straightforward interface: The interface of SWP calculators is pretty simple. You do not have to deal with complex symbols, statements, etc.
• Free to use: Most of the SWP calculators are free. You can use these as many times as you want.
• If you need to use swp calculator with inflation, you can visit https://swpcalculator.net

Frequently Asked Questions